Tag Archives: Noble Village Subdivision

Delta #EpicFail —Epic Fraud #3 : Security Sharing and not Caring….. who’s got that Constricting Feeling ?

Updated post.
Thu, 30 Jun 2016 at 9:23 p.m.

Received from Christchurch Driver [CD]
Tue, 28 Jun 2016 at 10:33 p.m.

Readers, in recent posts we have kicked the tyres of the Delta assets, put it up on the what-if hoist and peered into the grimy underside of the business. Unlike the Delta’s hired hands Murray & Co, we have considered the running costs. Our conclusion was that Delta was a very tired machine, running badly, with an overpaid driver at the wheel. It failed all the financial leakdown tests and was going to be an early entrant to the knackers yard because it was pulling a grossly oversized semi-trailer of debt. There, that’s all of the earthmoving metaphors needed for the evening….

However readers, in addition to all the other bad news we have received as owners of Delta, there is one further thing not considered by Murray & Co in their ask-no-questions, see-no-problems report that will further decimate its value. That is the likely cost to Delta of the impending court case that alleges Delta is a party to constructive fraud.

The High Court was advised on 13 June 2016 that Delta and Gold Band Finance are to be joined to the existing proceeding against Noble Investments Ltd.

Readers, after tee-ing up the obligatory Choysa – just one cup tonight, thanks – may wish to refer back to the Epic Fraud posts to refresh their memory about the story so far. In the first post it was explained how DCC claimed that there was no “relationship” with Gold Band, but in fact Delta had prepared a Security Sharing Agreement which Gold Band signed, which was a dictatorship, where Gold Band could not act in relation to the first mortgage in any way, without Delta’s permission.

Delta is 70% owner and 100% controller of that mortgage. While Delta is not yet named in the Court action, Delta is hiding behind the name of their security sharing partner Gold Band. That is, Gold Band’s name is on the court papers with the authority and instruction of Delta who is controlling Gold Band.

court levin-2001-12-17 [newyorker.com] tweaked nz

In the second Epic Fraud post (What Would Tom Kain Do ?) it was noted that Delta’s law firm had received a letter alleging Delta was a party to constructive fraud. What if? did not publish this post until recently as it was concerned that Council would somehow deem this defamatory or some other breach of arcane local body law. (Council has plenty of resources to seek to stifle legitimate debate, but none it seems, to clean the filters in the Portobello Rd stormwater pumping station). As Cr Vandervis says, Council should stick to its core tasks.

Your correspondent, in the name of duty, re-opened the arid pages of the security sharing agreement that is pivotal to Delta’s public assurances that all is well and its “investment” of $1.2M over the face value of the debt to acquire, is prudent and sensible (?). Expecting only to find parched prose, and arcane legal minutiae, yet again, there was a blooming oasis of sustenance for more posts.

Tonight we shall hold some clauses of this deed up for scrutiny, allowing it to twist and flap forlornly in the breeze, just like the broken street signs at the desolate and unfinished Noble Subdivision.

Clause 2.4 d) of the security sharing document has the remarkable sentence : where Delta instructs Gold Band that it “May refrain from doing anything that would be contrary to the law”. In any document this correspondent has ever worked with, obeying the laws of the land is not optional. Most legal and contractual documents have words to the effect that nothing in the document shall be contrary to the laws and acts current at the time.

So a) this statement was entirely unnecessary…. if the law of the land was intended to be followed. But b) if some ultra vires legal deception was intended, then some “clarification” was needed.

“May refrain” is not a ringing endorsement of a party’s intention to stay on the right side of the thin blue line. And when the instruction is in response to a long and detailed list of obligations imposed by Delta on Gold Band, it is hard to shake the notion that Delta did contemplate that some illegal activities were possible or even probable to recover some of its wasted millions. So it instructed Gold Band that they “may refrain” from any Delta instruction that may not be legal and proper, in place of the usual expectation to act lawfully…. at all times. Delta’s priority was what was “enforceable” under the document; Delta of course not being overly concerned with proper form or legal niceties such as performing major subdivision work without a consent.

But while a nod is as good as a wink to a sharp commercial operator like Gold Band, Delta are literal in outlook, and so, two clauses later, is the payback for Gold Band agreeing to “may refrain” from illegal activities, instead of acting lawfully at all times. At Section 2.4 f) in return for Gold Band doing precisely what Delta bids in terms of protecting its first mortgage interest, Delta promises Gold Band “Delta will pay all costs and expenses, “legal or otherwise” of any action taken by the trustee”.

Now Delta’s lawyers will rush in and say, CD is a buffoon – and a barely literate one at that !! He doesn’t have basic comprehension SKILLS ! “Legal or otherwise” is referring to the “costs and expenses” not the following words that say “of any action taken by the trustee”. Readers, that may be so, but the words legal or otherwise in relation to costs and expenses are redundant. The phrase all costs and expenses means precisely that – all of them. On the other hand, a learned Judge, having already knitted their brows over the words “may refrain from illegal acts”, when they see the tangled syntax of 2.4 f), in regard to “payment of all costs and expenses, legal or otherwise, of any action taken by the trustee” will look at the context, and will very likely conclude that Delta are at least contemplating illegal acts and then are reassuring Gold Band that they will still pay for the costs and expenses of those same illegal actions.

[excerpts]

SSA 21.12.2011 GBF Delta NIL 1

SSA 21.12.2011 GBF Delta NIL 2

Yes, yes, readers, I hear you – CD is being sensationalist – grasping at straws ! Trying to stay relevant ! Delta would be completely stupid to try and document illegal activities !! Sadly, readers, hubris is contagious, and Delta have a history on this project of operating on Delta terms, and the law be damned. However, there is another reason and that is, if Delta did instruct Gold Band to act illegally, and the question of payment was not sorted out, Delta could pull another static clothesline tactic out of the Tom Kain archives and refuse to pay Gold Band. Delta would say, à la Kain, Gold Band should have known, as a finance company experienced in mortgage lending, that what Delta were asking was illegal…. and they did this at their own risk and cost ! Take that, and your spurious cost claims with you, Gold Band ! ….What a tangled web of suspicion and mistrust the Noble Subdivision has left !!

The bottom line : While Delta deny they influence Gold Band in any way, these clauses stipulate that Delta will fund Gold Band’s legal costs incurred in the attempts to defeat the landowners’ prior lawful caveats and interest in the land. And let us not forget that Gold Band wanted to sell their first mortgage interest to the landowners, and Delta refused to allow it. They had that power under the deed – a dictatorship, remember, readers ? Your correspondent says that this sort of cynical desperation moves Delta from the merely dense category to the despicable.

Readers, citizens, this talk of illegal acts is not conjecture. In upcoming posts, we shall count the ways in which Delta is alleged to have not acted lawfully. Delta’s potential joinder to constructive fraud is just the start. If the allegations of these further acts are upheld, the consequences for Delta, and various high level DCHL and DCC personnel are just too awful to contemplate…. for the moment.

But tonight, spare a thought for the lawyer(s) who prepared this security sharing deed. It was undoubtedly never intended to see the light of day, much less be forensically examined and trashed in the good pages of What if?

There must be a sense of dread and unease in the weeks to come. Your correspondent says this imprecise and unenforceable deed is going to be systematically destroyed. Someone, we dare not name, will have indeed, That Constricting Feeling….

█ For more, enter the terms *delta*, *noble* or *epic fraud* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

*Image: newyorker.com – Levin 17/12/2001, tweaked by whatifdunedin

7 Comments

Filed under Business, Construction, DCC, DCHL, Delta, Democracy, Design, District Plan, Economics, Finance, Geography, Housing, Infrastructure, Name, New Zealand, OAG, Ombudsman, People, Pet projects, Politics, Project management, Property, Public interest, Resource management, Site, Town planning, Transportation, Travesty, Urban design

Delta #EpicFail —Epic Fraud #2 : WWTKD – What Would Tom Kain Do ?

Received from Christchurch Driver [CD]
Sun, 26 Jun 2016 at 11:59 p.m.

Dear Readers

The What if? site has attracted a lot of (unwelcome) attention from higher echelons of the municipality, in recent weeks, both in relation to the #EpicFail posts and others, with intimations some posts are defamatory. (What, this correspondent ? genteel to a fault !). Of course all the while claiming there is no problem with criticism and opinion….. just as long as it’s not too accurate.

This does the valuable service of confirming that we are getting close to the source of some very sensitive and awkward matters, and we need to box clever to avoid the constrictive embrace of harassments, and box clever we shall indeed.

Accordingly, your correspondent has taken a long tea break, but is soon to be active once more as the legal case regarding the Noble Subdivision first mortgage starts soon. This will be better than a soap opera :

Will Captain Crombie steer the good ship Delta from the treacherous legal waters ? Has the boat taken on too much debt and is it listing irreparably ? Will the head office staff make a safe escape with the aid of a golden parachute ? (Mixing airplane and boat metaphors here !)

Stay tuned readers, same bat-time, same bat-channel, and your correspondent will attempt to make the complex digestible, and show where Delta fits in all this.

Meanwhile readers, first some revision : cast your minds back to the Delta #EpicFraud post where your correspondent suggested that Delta were about to have an action brought against them for constructive fraud. It is your correspondent’s experience that Dunedin lawyers are notorious gossips (they make tea break at a primary school staffroom look like a sombre diplomatic forum).

Someone, who knows someone, who knows a person has confirmed that a letter was received by a Dunedin law firm in recent times, say… Friday April 1 2016, accusing Delta of constructive fraud under the Land Transfer Act and asking the firm if they were authorised to accept legal papers in relation to an action against them. Well, Gentlemen of Delta, I bet the Minties and Favourites got a thrashing, upon learning THAT ….now, on June 13 2016, the plaintiffs have formally made application to the High Court that Delta be joined to the action as a party to the alleged constructive fraud.

Alert readers of the #EpicFraud post will remember mention of the security sharing agreement for Delta, the “dictatorship” that would attempt to defeat the prior interests who had caveats, and how it is alleged that this was a form of constructive fraud. We can imagine there was a lot of rattling saucers, and a whole lot of Bell’s best consumed right now by its scribes… a local Dunedin law firm we dare not name. Writing unenforceable documents tends to give clients a good reason to blame the authors of such documents for difficulties, generate complaints to legal disciplinary forums, and claim damages and costs against a law firm.

This is the point of tonight’s teaser post….

This correspondent thinks that perhaps Delta have watched and learned from the dismal Noble Investments Ltd (NIL), and they have come up with a fiendishly cunning plan A and plan B. Plan A : Get an eager law firm to write an unenforceable document. If it works, great. If it doesn’t work, Plan B is to blame the law firm, apologise profusely to the offended parties and then sue the stuffing out of the law firm ! After all, it is a comprehensively feeble excuse for any law firm to say “But you told us to write it !”. Delta would then climb on their soapbox and say “We would NEVER do anything illegal, and if it was, why didn’t you advise us ?!”. Brilliant ! That is a static clothesline playbook right out of the Tom Kain archives !! A plan so cunning you could pin a tail on it and call it a weasel !! (with apologies to Blackadder)

But readers, we must confine ourselves to the facts, not indulge in lateral speculations that may injure the feelings of parties.

So, Gentlemen of Delta, can we please have the facts ?

Your correspondent thinks this is the last station on the line for the Delta Gentlemen to have a semi-controlled exit from the Delta / Noble runaway trainwreck, with credibility intact, by giving Dunedin the full account of what, why and how, before the impending court action does it for you. It’s not your money, it’s ours, and if Delta is now facing an action for constructive fraud; on top of losing many millions (acknowledged in MSM by those authorised to speak); someone – we say, the Auditor-General – will look closely at who was responsible. Who might that be ? Some clues : Who was heading up Delta when this deal was inked in 2009 ? Who has allowed this deal to become a toxic malignant cancer for seven long years ? How on earth did Delta (it appears) come to be facing an action for constructive fraud ? If there is any truth to these allegations, then who is to be held accountable ?

In a previous post, we suggested a legal opinion be obtained on Delta’s culpability, from someone far from Dunedin. More than ever, that needs to happen. Are there local politicians who can find some intestinal fortitude to assist on this compounding mess in election year ?

And readers, let’s keep a weather eye on complaints to the New Zealand law society over the next 6-12 months…..
train derailment 1 [twitter.com]

█ For more, enter the terms *delta* or *noble* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

*Image: twitter.com – derailment, tweaked by whatifdunedin after reading the Delta SOI 2016/17

7 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Design, District Plan, Dunedin, Economics, Finance, Geography, Housing, Infrastructure, Name, New Zealand, OAG, Ombudsman, People, Politics, Project management, Property, Public interest, Resource management, Site, Town planning, Transportation, Travesty, Urban design

Delta #EpicFail —Noble Subdivision : [rephrased] Conflict of Interest

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Sun, 13 Mar 2016 at 6:00 p.m.

Dear Readers and What –if Mobsters

Your correspondent is given to understand there are several of you who enjoy his posts, which is certainly gratifying to him, if not to the DCC. However readers are taxing mistresses, they demand fresh and current material for their reading pleasure.

Discerning readers of taste and sophistication, of which you are without exception, are firmly of the view that there is nothing as old as yesterday’s news, and tonight’s post is indeed recycled and somewhat elderly. But wait, as Noble Investments Ltd said to the Judge Osbourne, I can explain why I have reneged on my obligations….

This week Mr Graham Crombie did more than re-release Delta CEO Grady Cameron’s press release. He advised What if? that he considered this post below “defamatory” to Mr McKenzie. And said that in effect he will soon have a letter from his lawyers about this. Although, What if? hasn’t actually seen the letter yet. We think it is in Mr Crombie’s other pocket, tangled up with some minties wrappers and the latest Harcourt’s update on the Noble Subdivision mortgagee sale process. Yes, that document has gone missing too.

This Correspondent was cut to the quick. Him ? Defamatory ? A Tom Kain Klone ? Forsooth, he faints at the sight of his own blood !

Friends, Romans, Dunedinites, I come not to bury Mr McKenzie but to praise him. (Eventually).

Here is the post, with all traces of defamation removed…. for Mr Crombie’s reading pleasure….

****

Certain of you, have commented how in recent Council meetings DCC GCFO Grant McKenzie has several times now said he has a “conflict of interest”, when the question of the DCHL financial performance is raised by Councillors. He does not look comfortable in those situations.

OK, so what is this conflict of interest ? Mr McKenzie is the financial eyes and ears of the DCC. He is employed to preserve and maintain the financial stability of the DCC. This includes managing the hundreds of millions of debt that the DCC and its DCHL companies have; and having full oversight of the DCHL companies, which are in theory meant to be significant revenue generators for the DCC. (But, as Mr McKenzie admitted to Cr Lee Vandervis recently, DCHL companies will generate ZERO income (ie dividends) to the DCC for the next three years at least). However, despite the lack of dividends, they are still very significant DCC assets and it is completely right that Mr McKenzie should know in detail what is going on at DCHL.

This correspondent does not see how a conflict of interest can arise.

DCHL companies, owned by DCC, are for the sole purpose of generating a financial return to ease the rates burden. The historical amount of contributions provided by DCHL is shouted from the rooftops at every available opportunity by DCHL boosters. To this correspondent, there are only two ways in which Mr McKenzie could have “a conflict of interest” as he describes it. One is if the actions of the DCHL companies exceeded the risk profile that Mr McKenzie felt was appropriate for a DCC owned entity. The other is if the DCHL Companies were not in fact providing full or accurate information about their activities or intended activities to DCC or the elected representatives, and placing DCC at risk that way.

Readers, and Mr McKenzie, need to remember that Mr Larsen said in his report that the DCC needed to have a very low threshold for commercial risk, and much better communication. Mr McKenzie is there to make sure that DCHL doesn’t exceed a very low risk threshold and to tell us what he has found there. Tick the boxes for those items.

But who is paying Mr McKenzie ? The answer is the DCC. Therefore Mr McKenzie does not have a conflict of interest. He has a clear obligation to disclose to Council and ratepayers anything that is of concern at DCHL. He is not paid by council to shuffle from one foot to the other and claim a conflict of interest when asked questions of DCHL financial performance.

The clash_revolution-rock-w2 tee [www.the-rudy.com]

We should spare a thought for Mr McKenzie. He is the senior DCC staff member that has to represent the DCC’s interests. Those interests, first and foremost are to ensure that those DCC owned DCHL companies operate with a very low threshold for commercial risk. On the other hand, against him are legions of DCHL directors, who, if nothing else, appear extremely good at sugar coating bad news, or cloaking it in such a way as to make discerning the facts extremely difficult. (Mr Crombie, please read the Auditor-General’s report before you go reaching into your pocket). Add that to the subtle and not so subtle peer pressure, and it is easy to see Mr McKenzie has a tough job safeguarding the interests of ratepayers in respect of DCHL.

Refer to the video record (Part 1 and Part 2) for the full council meeting of 22 February 2016. This correspondent believes there is a (very) high possibility Mr McKenzie has not been told the full facts about Delta at Noble, or it has been spun to him with a few key, inconvenient facts omitted. If this is in fact correct and he acknowledged this, and then advised the city what he does know and provided an accurate assessment of the actual risk to ratepayer funds against the allowable “very low risk” threshold, he would have the support of DCC upper management and probably a job for life – if he wanted it.

Mr McKenzie would not have to look too far to find inspiration or a precedent in Dunedin. Just a couple of blocks away at the Hospital in fact. In 2008 the recently appointed Health Board Chief Financial Officer, Robert Mackway-Jones, discovered some unusual transactions that was of course the $16.9M Michael Swann fraud. Mr Mackway-Jones didn’t let up, pushed the issue and found that neither the Board Chair, Mr Richard Thomson, nor the Board CEO, knew of the transactions. Mr Mackway-Jones was the hero of the Swann case; and Mr McKenzie only has to present the facts to Dunedin ratepayers to achieve the same status.

This correspondent understands Mr McKenzie is already well regarded within DCC upper ranks. But if he did this he would be so popular with Dunedin ratepayers he could run for Mayor next time around….

Dunedin ratepayers just need Mr McKenzie to represent their interest, and forsake the tea and cakes, and mutual backslapping with DCHL Directors.

This will mean clashes with the DCHL directors at times……..

Tis food for thought, mobsters (as the Clash would say…. Revolution Rock, London Calling, 1979).

Related Posts and Comments:
● 11.3.16 Delta peripheral #EpicFail : Stonewood Homes & ancient Delta history
● 6.3.16 Delta #EpicFail —Noble Subdivision : Tea & Taxing Questions
● 6.3.16 Delta #EpicFail —Nobel Subdivision : A Neighbour responds
● 5.3.16 Delta #EpicFail —Noble Subdivision —Epic Fraud
● 4.3.16 Delta —Noble Subdivision #EpicStorm Heading OUR WAY
● 4.3.16 Delta #EpicFail Noble Subdivision : Councillors know NOTHING
● 2.3.16 Delta #EpicFail Noble Subdivision : A Dog, or a RAVING YAPPER?….
● 1.3.16 Delta #EpicFail… —The Little Finance Company that did (Delta).
29.2.16 Healthy views Monday midnight to 6:00 p.m.
● 29.2.16 Delta #EpicFail Noble Subdivision : NBR interested in bidders
● 28.2.16 Delta #EpicFail Noble… If I were a rich man / Delta Director
● 27.2.16 Delta #EpicFail Noble Subdivision Consent : Strictly Optional
● 27.2.16 Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent…
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● Gold Band Finance Prospectus No. 31 Dated 22 April 2015
View this 126pp document via the NZ Companies website at: https://www.business.govt.nz/companies/app/ui/pages/companies/321896/documents — go to Prospectus uploaded 23 Apr 2015 14:33

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

*Image: the-rudy.com – The Clash Revolution Rock w2 tee

3 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Design, District Plan, Dunedin, Economics, Geography, Hot air, Infrastructure, Name, New Zealand, People, Politics, Project management, Property, Resource management, Site, Town planning, Transportation, Travesty, Urban design

Delta peripheral #EpicFail : Stonewood Homes and ancient Delta history

Stonewood Homes - Chow Bros [stonewood.co.nz]

Received from Chrsitchurch Driver [CD]
Fri, 11 Mar 2016 at 1:35 a.m.

Your correspondent is going to meander down some tangential subdivision side streets tonight (not the main collector road, the excavator won’t fit on those….) and consider the curious case of Stonewood Homes.

It was probably inevitable given the very shallow gene pool that South Island companies fish in for independent directors, that a name would pop up that had also had some previous form with Delta.

However, before we excavate that particular trench, let’s consider why the shoring gave way on Stonewood, why the temporary support from the bank buckled and the subsequent structural failure – (the engineering metaphors are flying thick and fast tonight….)

Your correspondent is very bemused at the vast sums that a large number of building and engineering companies seem to be able to generate – in the negative. An internet search shows a long and regular list of failures. (Delta Civil Division would doubtless have joined them had it not had ratepayer funds to prop it up). Hartner Construction in 2001, about $20M, Wellington Construction in 2012 (unknown), Mainzeal Construction in 2013 (between $60-130M, dependent on if related party transactions can be unwound) and, closer to home, Southland’s own Amalgamated Builders (also with a branch in Dunedin) who managed to lose $20M in just two years when they bought a reputable Auckland company, Goodall Construction, renamed it Goodall ABL and then proceeded to destroy it in 2001.

There is some illuminating information online that shows the insane amount of risk that companies in the construction sector assume for what appears to be very little reward.

In the ABL Goodall case, property commentator Bob Dey described Goodall ABL as “a victim of trying to win market share on no margin, with a maximum guaranteed price contract in place”. Quite why anyone would seek to perform somewhere between $60-80M of work in two years for no return sounds like Delta-level stupidity, and certainly, the result was the same : ABL Goodall went so comprehensively broke, mainly with subcontractors’ money, that it was a major catalyst for the Government of the day to introduce the Construction Contracts Act in 2002 which provided some protection for Subcontractors. Proof that Southlanders do have some uses other than milking cows (readers, I jest).

Delta may yet provide compelling evidence for the Government to remove the “power of general competence” that Territorial Authorities received from the Government in 2002 that started many down the path towards illusory piles of gold that vanished in a mirage, along with a lot of public funds.

Memo To Mr Crombie : The CCC have admitted defeat and are trying to sell their Delta equivalent, City Care : why not join up and make it a two-for-one deal ?

But back to Stonewood. A trio of heavy hitters arrived in February 2014 to help fix the Stonewood Homes brand. In the press release it was noted that in 2013, Stonewood had consented 407 homes, had a turnover of $133M, and was aiming for 500 consents in 2014.

Your correspondent now will do something unheard of – making excuses for Delta…. as follows :

Building houses is not the same as civil contracting or commercial building. Those sectors all indulge in unique one off projects, with different specifications, different designers and engineers who have different standards. Lots of risk with ground conditions, legal disputes are legion.

But “group” housing is just different variations on the same cookie cutter. Standard designs, tweaked a little here and there, flat sites, lots of repetition, production line type processes. Houses started and finished around 14-16 weeks. Deposits before you start, a sales force to keep the numbers flowing. Any amount of back costing and analysis off repetitive designs to check what the numbers should be. It’s all been done before, lots of other companies are doing it so “benchmarking” your company against your competitors is easy.

Stonewood weren’t building difficult or expensive homes : Their average house cost around $325,000 in 2013. (Turnover of $133M for 407 homes).

Receivers KordaMentha confirmed that Stonewood had built up “significant” debt since the earthquake. Let us assume that Stonewood’s losses began in 2012 continuing in 2013, 2014, 2015. The loss is currently $30M. Your correspondent understands that the ASB is owed $5M and that typically, of the 110 houses underway at any one time, only 30 were profitable, and this was known within the company.

That Stonewood were unable to make any money at all, but instead went deeper into debt over a four-year period of huge demand is certainly testament to some Delta-level management deficiencies. One, or one and a half years of losses is grave but understandable, two to three is indefensible, and four years just plain carelessness !

Assuming an average turnover of about $115-120M per year (ie a peak turnover of $133M in 2013), this means that each year they lost $7.5M on average. (It was probably less in 2012, a lot more in 2015).

Put another way, on every house they built, over a four-year period, they lost around $21,000. Yes, they can definitely have a seat at the Delta table. And one Stonewood Director has sat at that table before, and that is Mr Jim Boult.

Jim Boult [Stacy Squires - stuff.co.nz] bwNow Mr Boult, while no Tom Kain in terms of litigation, certainly knows his way to his lawyer’s office, so this correspondent shall confine his comments to the facts :

Mr Boult, you may recall, had a 50/50 Joint Venture (JV) with Delta on the failed Luggate Development, where Delta lost $5.9M. Delta’s terms there were similar to Noble : A $5M advance to cover the subdivision work, payable only when the sections were sold.

Mr Boult utilised a valuer on behalf of the JV who had previously valued the land for his company. The valuer, in calculating the value of the land assumed a figure of $55,000 per section for Development costs. The actual cost was $105,000 per section. The valuer assessed the value of the land Delta bought a 50% share in, at $10.7M. There were potentially 172 sections that could be developed on the land. Six of the 172 sections were sold. The remaining land, with (a relatively small amount of) Delta’s improvements, was eventually sold…. for $1.5M. This information is all contained in the Auditor-General’s Report (14 March 2014).

A small but noteworthy detail included in the Auditor-General’s report was that the terms of the Joint Venture meant that Delta staff were not paid for any time they spent on the JV or the project, unless it was directly related to the Civil Work. A Project Management firm, Signal, was employed to manage the project. However Mr Boult sought and received $5,000 per month “for his time” spent on the Luggate JV.

Back to Stonewood, it turns out that Mr Boult was unable to make any difference to turn around Stonewood’s fortunes in 2015. Mr Boult’s enthusiasm for Stonewood : “I am truly delighted to be the chair and help guide the company in its future direction” lasted just 12 months. Nonetheless he obviously saw something he liked at Stonewood as he confirmed last week that he had quit as a Director of Stonewood on 1 February 2016, because, in concert with some employees of Stonewood and some franchisees, he was trying to buy Stonewood. This seems unusual behaviour for the chair of a large company, but then your correspondent is not a member of the Institute of Directors, and is uncertain of the usual directorial protocols about directors or chairmen of the board trying to buy a company they just resigned from last week. Perhaps a reader experienced in such matters could provide enlightenment.

Yes readers, I can sense your impatience : Join the dots you say ! This correspondent’s opinion, and it is only an opinion from the outside looking in, is that Mr Boult, was looking to buy not only Stonewood, but is most likely involved with a mortgagee sale bid to purchase the Noble Subdivision at Yaldhurst. The intention being that Stonewood would be the builder of the subdivision, both effectively controlled by Mr Boult.

Mr Boult knows the subdivision business, and he now has an inside view of how housing companies are run (or more accurately, how not to run one).

Despite Mr Boult’s defeat at the hands of the Brothers Chow in respect of Stonewood, a bid for Noble may well be attractive to him.

Now given Mr Boult’s history with Delta, it would seem highly likely that if this were the case, there would have been some contact between Mr Boult and his people and Delta.

Can Delta or its Directors or Mr Crombie confirm ? And of course as is the refrain, that no more public funds will be put at risk ?

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
● 10.3.16 Noble Subdivision next on the shopping list !!! You couldn’t…
● 6.3.16 Delta #EpicFail —Noble Subdivision : Tea & Taxing Questions
● 6.3.16 Delta #EpicFail —Nobel Subdivision : A Neighbour responds
● 5.3.16 Delta #EpicFail —Noble Subdivision —Epic Fraud
● 4.3.16 Delta —Noble Subdivision #EpicStorm Heading OUR WAY
● 4.3.16 Delta #EpicFail Noble Subdivision : Councillors know NOTHING
● 2.3.16 Delta #EpicFail Noble Subdivision : A Dog, or a RAVING YAPPER?….
● 1.3.16 Delta #EpicFail… —The Little Finance Company that did (Delta).
● 29.2.16 Delta #EpicFail Noble Subdivision : NBR interested in bidders
● 28.2.16 Delta #EpicFail Noble… If I were a rich man / Delta Director
● 27.2.16 Delta #EpicFail Noble Subdivision Consent : Strictly Optional
● 27.2.16 Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent…
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision : Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● Gold Band Finance Prospectus No. 31 Dated 22 April 2015
View this 126pp document via the NZ Companies website at: https://www.business.govt.nz/companies/app/ui/pages/companies/321896/documents — go to Prospectus uploaded 23 Apr 2015 14:33

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

*Images: (top) stonewood.co.nz – Chow Bros | stuff.co.nz – Jim Boult by Stacy Squires

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Delta #EpicFail —Noble Subdivision :   Tea & Taxing Questions

Received from Christchurch Driver [CD]
Sun, 6 Mar 2016 at 10:23 p.m.

Mr Crombie has spoken. A press release on Thursday : Something old, something new, something borrowed, with no clue.

Your correspondent has a theory in relation to Mr Crombie’s press release. Your correspondent surmises that a copy of Delta CEO Grady Cameron’s press release appears to have stuck to Mr Crombie’s saucer (stress – jiggling – spillage !!) when he was having tea and cakes in Mr Cameron’s office last week, and Mr Crombie absent mindedly put it in his pocket. Mr Crombie being a busy man then noticed it a few days later amidst some empty Cadbury Favourites wrappers and Kit-Kat bars. Thinking that he was meant to have done something, and with Grady’s cell phone off, he panics, and emails off the release, which of course is a re-run of Mr Cameron’s effort.

Mr Crombie did say there had been “some misinformation” about the mortgagee sale process. There certainly has, and it is all from Delta and its directors.

Your correspondent and Delta are of one mind here : There is no need for any confusion, Dunedinites will have a lot less suspicion and worry if we had accurate information that Delta and its Directors were not the white collar robbers of the DCC public purse that your correspondent has made them out to be.

To this end, some public minded citizens might want to put in a LGOIMA request, or perhaps write to the ODT with the following questions for Delta, to assist with the excellent What if? efforts on Noble to date.

Let us relax with a cup of Bell’s best and have our fears assuaged. Or perhaps, let us watch the twists and turns of outrageous logic that Mr Cameron will use to explain away these very simple questions :

How much of the $3.3M Delta paid to “strengthen its position” has been paid to Gold Band and Avanti Finance. This is an easy one for starters – readers of course know the answer ($2.7M) because Gold Band have told us, but if Delta get this wrong, we then know it has a telling-the-truth problem as well as previously canvassed numbers, counting and comprehension problems.

What was the remaining funds of the $3.3M spent on ?

Or in case this isn’t clear enough :

How much of the $3.3M has been paid for any advice, fees, or any other sort of payment in relation to the Noble Yaldhurst Subdivision, that was not for the actual direct purchase of first mortgage securities ?

In regard to the question above, who was this money paid to ?

How much Head Office staff time has been spent on the Noble Subdivision since December 2009 and has it been charged to the project ?

Did Delta, or any party associated with Delta, instruct, or convey to Gold Band Finance in any way, that Delta would not allow Gold Band to sell its first mortgage security to other parties (ie, other than Delta) with an interest in the land ?

Can Delta confirm that it will not offer vendor finance, and will not enter into a profit / revenue sharing agreement to the eventual purchaser of the land from the mortgagee sale process ?

Can Delta confirm that in addition to the above, it will not offer any kind of assistance to the eventual purchaser of the land ?

How much has Delta or DCHL paid Mr M Frost for any services related to the Noble Subdivision since 2012 ?

Can Delta confirm that no past or present Delta Directors, and also Mr J Boult, and Mr M Frost, are not involved, or offered any kind of advice or assistance to any of the mortgagee sale bidders ?

Is it true that due to recent developments, and subsequent to the date that tenders closed for the mortgagee sale, the firm conducting the mortgagee sale process, and/or other parties, has been urging other parties, who did not make a bid, to make a bid, even though tenders have closed ?

Given that we are dealing with Delta, perhaps readers should just consider three at most per request so as not to overtax Delta capacities.

These are all critical questions. Memo to Grady and Graham : Better to answer them now, the next time these questions are asked you will be best advised to have a lawyer – your own personal lawyer that you pay for, not a Delta one – present. (Suggestion : NOT the ones that wrote the security sharing deed….). Memo to Graham : $900 a day will not go far on lawyers’ costs.

And Graham : Note to Self : Conduct cost / benefit and personal risk register of Delta involvement. (Memo to Grady : At a salary of $2,090 per working day, hire whatever lawyer you want).

Alert readers will have noticed some of these questions suggest there are yet more horror stories and shady dealings your correspondent wishes to bring to the surface. Indeed there are, but let us have Delta’s position first, to avoid speculation. Of course we will have no option to speculate if nothing is forthcoming, and speculate we will.

For your correspondent, Delta at the Noble Subdivision is the gift that keeps on giving.

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

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Delta #EpicFail —Nobel Subdivision :   A Neighbour responds

Comment received in reply to CD’s latest post (5.3.16):

Chutchings hut
March 5, 2016 at 9:06 am

The neighbours have a history of objecting, they are not the innocents you portray. The allegations about inadequate infrastructure are nonsense.

A Neighbour responds
Sun, 6 Mar 2016 at 3:26 p.m.

“Chutchings hut”, your post here resembles that of C(hris) Hutching’s from NBR. Maybe you’re both?? Either way your posting here and his on NBR, respectfully, is unsubstantiated and misinformed as many have been by NIL during this sad saga. Allow me to enlighten you.

The CCC stormwater experts, an external peer review, and even NIL’s own stormwater designer Cardno have confirmed the stormwater infrastructure IS “inadequate”. Existing roads need to be dug and pipes upsized. I can send you whatever evidence you want?

Further, the road infrastructure is not only “inadequate”, it was found by the Independent Safety Audit [Dr Turner and other traffic experts] to be have “numerous serious safety issues that cause frequent serious injuries and deaths”.

This is why the Elected Council voted to quash the retrospective decision CCC staff procured non-notified to consent the unsafe roads they had already permitted to be constructed without consent.

You are right though that resident stakeholders in the subdivision (neighbours as you refer to them) have a history of objecting, that’s because they have had much to object about. Your post here that they are “not innocents”, and Chris Hutching’s information in NBR that the objections were belated objections” … “after consents were obtained and the streetworks constructed is not correct. Public information proves otherwise:-

• Affected residents that will have to use these roads objected from mid 2010 when the roads were being constructed without consent to grossly non-complying standards.

• NIL and CCC staff had agreed to these gross non-compliances behind-closed-doors.

• CCC staff oppressed the affected residents and denied them (and the public) their legal rights under the RMA to oppose the gross non-compliances and dangers.

• The illegally built roads were retrospectively consented 12 months after the objections, in July 2011. (This was 19 months after the variation application was made in December 2009 to make the main spine road 7.5m narrower than required. Doubling of traffic on the narrow roads due to non-notified increases in residential density and the commercial area came later).

• The Elected Council voted for the Independent Safety Audit (against CCC staff’s strong advice). It found the non-complying roads had “numerous serious safety issues that cause frequent serious injuries and deaths”. This caused the Elected Council to quash the wrong, unsafe and “unreasonable” (“RMA term”) decision that CCC staff’s oppression of affected parties and CCC staff’s false tailoring of expert reports ensured.

• Yours and Chris Hutching’s NBR misinformation on this is respectfully forgiven; many have been misinformed of facts in this sorry saga.

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Delta #EpicFail —Noble Subdivision —Epic Fraud

Received from Christchurch Driver [CD]
Fri, 4 Mar 2016 at 10:42 p.m.

teacupandsaucer [dreamstime.com] delta

Dear Readers

A preliminary, a disclaimer : Your correspondent is not Ms Ali Jones, or Felicity Ferret ….and is cut to the quick by such a comparison. (Well he isn’t actually sure who Ms Jones is but won’t let that get in the way of a good line). However, readers, he would never be so careless with the financial facts that affect Dunedites.

On a more serious note (unusual so early in a CD post), your correspondent has been shaken to the core with new information that has come to light in the last 2-3 days. By now you know the prerequisites : Strong tea, macaroons, and a big saucer. And today, some pepto-bismol. You will feel VERY queasy after this one.

Our correspondent has jump started the Delta long reach excavator and quickly unearthed a massive SOFT SPOT in Delta credibility.

Delta and the DCC are going to lose a lot of ratepayer funds at Noble. There is no happy ending, no handsome prince to kiss and revive Delta to financial health, where their $14.6M (11.3M + 3.3M) core debt will be paid. There is no bona fide mortgagee sale.

Let’s consider the statements of the DCC Group Chief Financial Officer at the full council meeting of February 22; he told the council there was no “relationship” between Delta and Gold Band Finance, the Noble First Mortgagee. Well now, that would depend on how one defines a “relationship”. In our modern world, it’s all about equality, having an equal voice in all matters. Both parties, facing the future, hand in hand, etc. And yes, by those rose tinted soft focus lights, no, there is not a Delta / Noble “relationship”. What there is, is a dictatorship. Gold Band will do whatever Delta say. This is in writing. It is in a thing called a “Partial assignment of Debt and security sharing deed”, and commits Gold Band to servitude to Delta. And readers, you can check for yourself the claims your correspondent makes about this document. The document is posted right here, below. Although there is no reason to doubt –-your correspondent does not work for Delta….

It is Delta that are behind the “mortgagee sale” of the Noble Subdivision.

Well and good, readers may say, we like that Delta are in control, and that fine Mr Crombie is steering the good ship Delta out of troubled waters. Really ? This correspondent thinks the ship is being steered…. straight into the High Court.

Your correspondent has been advised that a court action against Delta for CONSTRUCTIVE FRAUD (stress ! rattling cups !!) is imminent, from a party to the subdivision, due to this “security sharing agreement”.

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Delta —Noble Subdivision #EpicStorm Heading OUR WAY

Election Year : The following item is offered in the public interest. -Eds

Delta Alert

IMPENDING POST ALERT
CD has THE story for you……….. soon

█ For more, enter *delta* in the search box at right.

Posted by Elizabeth Kerr

*Image: thinkdelta.co.nz – delta-waste-digger tweaked by whatifdunedin

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Delta #EpicFail Noble Subdivision : Councillors know NOTHING

ODT 3.3.16 (page 14)

ODT 3.3.16 Letter to editor White p14

THIS IS SURPRISING, DO WE BELIEVE HIM

“Delta has provided regular updates to its shareholder, Dunedin City Holdings Ltd, which has in turn informed Dunedin city councillors in briefings throughout the project.” –Grady Cameron, Delta Chief Executive

IPAD BLANK, NO MESSAGES, BLUE TAPE

Delta-communications-ipad
delta-communications-ipad 1

Urban Dictionary
Blue Tape: A term used to express the ratio of service offered in an Emergency …. versus the quantity of seemingly available staff. Often considered to be greater in truth when expressed as the inverse of the service to staff ratio.

DUNEDIN CITY COUNCILLORS FEAR MULTIMILLION-DOLLAR LOSSES FROM DELTA BUT THEN WHAT IF? HEARD IT WAS DELTA DRIVING THE MORTGAGEE SALE AT YALDHURST

[timemanagementninja.com]
Blue tape is the start of something new.
A construction project. Building something new. Remodeling something existing. Producing something better than was there previously.
Blue tape represents constructive, productive activity.
So, which does your company deal in? Red or blue tape?

GRADY ????!!!!!!!

Related Posts and Comments:
● 2.3.16 Delta #EpicFail Noble Subdivision : A Dog, or a RAVING YAPPER?….
● 1.3.16 Delta #EpicFail… —The Little Finance Company that did (Delta).
● 29.2.16 Delta #EpicFail Noble Subdivision : NBR interested in bidders
● 28.2.16 Delta #EpicFail Noble… If I were a rich man / Delta Director
● 27.2.16 Delta #EpicFail Noble Subdivision Consent : Strictly Optional
● 27.2.16 Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent…
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

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Delta #EpicFail Noble Subdivision : A Dog, or a RAVING YAPPER?….

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Wed, 2 Mar 2016 at 12:50 p.m.

Your correspondent today was intending to provide his further investigations and suspicions as to what was in fact really happening with the “mortgagee sale” process at Noble, and what they are up to. Pausing here : The term “mortgagee sale” is used in the loosest possible way. Your correspondent has been at work on this, and as the trail to the mortgagee sale has unfolded in recent posts, your correspondent now thinks he has taken What if? readers down a couple of dead ends in an early post or two concerning where Delta may have ranked and what Delta / DCHL are plotting…. He made the mistake of thinking a mortgagee sale was in fact a true arms length mortgagee sale, where security holders went to the market to sell a distressed asset, at whatever price the market saw value at. That is the consequence of seeing through the glass darkly, with a group of men determined to keep secrets, but your correspondent has enlisted some help, and reckons he now has the measure of Delta’s machinations in regard to their ultimate plan.

Readers may be surprised to hear that your correspondent has no personal axe to grind with any of the public figures he has lampooned, merely that on the facts some of them are unfit to occupy the positions they do.

Over a cup of tea, it has been decided to give DCC and Delta a chance to respond to the recent posts by releasing clear information about what has happened and what plan Delta / DCC has to exit the Noble Subdivision. While any Delta / DCC disclosure will be a lot less entertaining than this correspondent (even if I say so myself….) we must sacrifice humour for accuracy at this critical juncture.

It is a critical juncture because this correspondent believes if pressure is not brought to bear on Delta / DCC now, a fait accompli will be soon presented that is going to involve more public funds at risk.

Mr Crombie will assume a sombre tone, and announce that there was no option. He will become TINA Crombie. – There Is No Alternative.

As Justice Brandeis said ‘sunlight is the best disinfectant’ and all of Dunedin deserves precision as to what is going on. Of course, as What if? readers will know, if the Delta / DCC does not respond to the kind and gentle approach (we must give them a chance, readers) there are other avenues presently being explored….

Mayor Cull’s lack of transparency is extremely concerning, and is an indicator to what is happening. If indeed there was a proper mortgagee sale process occurring with negotiations with multiple bidders unrelated to Delta / DCC, there is absolutely no reason why he could not confirm that. This correspondent thinks he cannot because it isn’t true. Blatant falsehoods have a habit of being discovered.

Your correspondent is not a proud or vain man – (well, his wife may not agree) – he and most of Dunedin would be very, very happy if he was proven to be quite wrong, and Delta’s plan did not involve any further public funds. This of course doesn’t make the previous Delta ineptitudes go away. To labour the point : The directors must be held to account.

Today, instead of the headline act, we will tease out some of the implications of the Delta decision to continue work on the Noble Subdivision in December 2009, when the variation to the consented subdivision was revealed to them and they continued on.

This was the critical decision that led to Delta backing up a truckload of dollars off Yaldhurst Rd and tipping it into the freshly excavated ground at the Noble Subdivision. (Your correspondent likes earthmoving metaphors as much as the next man).

Quite apart from the ethical and legal considerations arising from committing a major offence under the Building Code, this correspondent believes this was also a very bad financial and strategic decision.

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Delta #EpicFail Noble Subdivision : Gold Band Finance —The Little Finance Company that did (Delta).

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Tue, 1 Mar 2016 at 4:17 p.m.

Your correspondent thought it useful to perform some financial excavation and unearth those precious first mortgage numbers that Graham Crombie and Mayor Dave Cull refuse to reveal in respect of the Noble Subdivision. They are the key to what Delta will eventually receive for its official $24M + debt on Noble. Your correspondent worked on the premise that if Delta is trying to hide something, it shouldn’t be too difficult to find at all. Your correspondent was not disappointed.

As they say in Delta out on the site, it was a good day, the ground was soft and the going was good. It didn’t take too long at all to get to the RL of the matter. (RL = Reduced Level…. excavator talk).

But inevitably, as is the fashion of these #EpicFail posts, there is evidence of continuing Delta stupidity, and yet another clumsy attempt to hide the facts from the ratepayers of Dunedin.

Your correspondent has long been curious about the first mortgagee at Noble Subdivision. Who they were, how much they were owed, what was their plan to exit out of this mess. Various entities had been mentioned in the media, but the company is Gold Band Finance. This is a tiny finance company : it has just $15.6M in TTA (Total Tangible Assets), and in August 2013 this one loan – in default – represented 21.30% of their total assets. Only 29% of the company’s lending is in property, and Noble was 70% of this. If Noble turned sour, this company was gone.

As it was, Gold Band breached their trust deed every year from 2009 until 2014 as a result of Noble, and twice had to pull its prospectus and not accept funds because the Trustee was so concerned about its position that it wouldn’t give Gold Band a waiver because the trust deed breaches were so serious.
(Memo To Delta Directors – Find that Trustee and appoint him as an auditor).

Gold Band then in August 2013 decided it needed to get most of this paralysed elephant off its back, so it could continue breathing and operating. Thus it sold part of its first mortgage debt…. to Delta.

Now the usual course of events is that when banks or finance companies are under pressure and want to sell distressed loans, they do so at a discount. That is, just as an example…. The face value is, say, a few million, the borrower is a deadbeat and hasn’t paid anything for years, the loan is in default and the neighbours are suing him for unconsented work (sound familiar ?). The seller would grab 50-60 cents in the face value dollar with both hands and “move on”, to borrow a term from the Cull lexicon.

Typically on land / development projects, a first mortgage will go no more than 40-50% of Loan to Value ratio (LVR) : But Gold Band had assessed the LVR at 71%, so even the first mortgage was far into the red zone. We will return to this in a later post.

From this, what a person of greater than room temperature IQ would say : “Dear Gold Band, I like the cut of your jib, the quality of your borrower and prospects of this mortgage. This (broken) mortgage is a bargain at full value ! Where do I sign ?!

This correspondent can hear the collective ratepayers’ prayer, “Do not say it… no, please do not say Delta paid full value” ….Readers, Delta did not pay full value. It paid more.

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Delta #EpicFail Noble Subdivision : NBR interested in bidders

Updated post
Mon, 29 Feb 2016 at 7:28 p.m.

The NBR (National Business Review) on Monday, 22 February 2016, featured an article by Christchurch Bureau reporter Chris Hutching, who says:

“The latest problem [for Delta] involves the Noble Park subdivision (managed by interests associated with Apple Fields) on the western outskirts of Christchurch where some of the properties are the subject of a mortgagee sale. Tenders close on February 12 and parties related to the developers and Delta are understood to be bidders.

And

“Another hurdle has been a series of actions by a handful of neighbours who have lodged caveats. They were the unsuccessful respondents in last year’s High Court case brought by Gold Band but have subsequently appealed. However, their cause of action may become null and void in the case of a mortgagee sale, according to another court ruling.”

█ To read the full article, go to NBR Print and NBR ONLINE subscriptions: http://www.nbr.co.nz/subscribe

Previously, What if? Dunedin sources had it that Jim Boult and Mike Coburn were back in the picture…. two names mentioned in Auditor-General Lyn Provost’s investigation and report (March 2014) on Delta’s failure with subdivisions at Luggate and Jacks Point.

In a more recent article, NBR business journalist Tim Hunter gets stuck into Delta issues – providing a general overview on concerns he has with Delta’s position to date. More is likely to follow.

The National Business Review
February 26, 2016 Page 2 Comment – Hunter’s Corner
Tim Hunter

How council company handed millions to shaky developer
The risks of local authority over-reach are again on display in Dunedin

Excerpt (closing):

The timing, size and nature of the security deals between Delta and Noble imply the council company was advancing millions of dollars in credit to Noble to finance the work.
Delta’s accounts say one counterparty defaulted on two principal sums of $6.35m and $5m, as well as other financial commitments, although it held security in the form of mortgage and general security agreements.
The implication is that Delta is owed the eyewatering sum of $11.3m by one single customer, plus interest and penalties, with the only hope of recovery being from the exercise of its security over property in the subdivision, which may or may not be worth enough to cover it. Tenders closed on a mortgagee sale on February 12.
If so, Hunter’s Corner is amazed that a council-owned company would take on work on such terms and hopes it will in future remember that ratepayers unwillingly carry the can for its cock-ups.
It should also be a reminder that councils would do well to kill off their commercial risks.

█ To read the full article, go to NBR Print and NBR ONLINE subscriptions: http://www.nbr.co.nz/subscribe

Related Posts and Comments:
● 28.2.16 Delta #EpicFail Noble… If I were a rich man / Delta Director
● 27.2.16 Delta #EpicFail Noble Subdivision Consent : Strictly Optional
● 27.2.16 Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent…
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

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Delta #EpicFail Noble Subdivision : If I were a rich man / Delta Director

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Sun, 28 Feb 2016 at 9:10 p.m.

Your correspondent has used strong words to criticise the Delta Directors in recent posts in respect of the Noble Subdivision.
“Ineffectual”, “serial head nodders”, “slumbering”.

Doubtless some of the Directors concerned will disagree, violently.

Has this correspondent been too harsh ? After all, it is easy to have 20/20 hindsight.

So today let’s look at the “WWYD” test – What Would YOU Do – in the same situation.

Your correspondent had given this some thought on this sunny Sunday, and while not a captain of industry or commerce as the actual directors, is willing to give it a go.

Yesterday’s post asked if the Directors had any ability to rein in Delta’s management when necessary. This correspondent thinks that is the key issue.

In any company the executive team is tasked with running the company day to day, meeting their various KPI’s and targets, and quite properly that is their focus. No one is perfect and there will be mistakes and duds that could not have been foreseen.

The Directors are there to provide governance and limit the risk to the shareholders. This was doubly important for Delta, as Warren Larsen said DCC companies needed to have a particularly low risk threshold, being publicly funded, and because Delta was operating in the very high risk property development arena.

A further even more basic duty is to ensure that the company operates lawfully at all times.

That is the lens through which I as a Director, would view Delta’s activities.

With that in mind, I thought how I as a prudent Director would respond when at a Board meeting in late 2009, or very early 2010, when it is assumed the Directors learned of the plan change at Noble Yaldhurst just two months after starting work in October 2009.

As a Delta Director I would know that at some point it was likely there were going to be some thorny issues ahead on Noble, particularly given the experiences already encountered at Luggate and Jacks Point.

As a professional Director I would expect the management to have a response to the problem. I would also know that ‘when things go wrong’ is where there is always potential for greater risks to be assumed so Directors would need to be especially vigilant when evaluating management’s plan to fix the problem.

As a Director I would know that management in general don’t like problems – they just want to get rid of it in the fastest way generally and focus on the business and meeting their KPI’S.

They often don’t get a good perspective on the bigger picture. That’s what the Directors are for.

So when it was explained that yes, there was an “issue” with budget costs, but the plan by the Developer was to change the subdivision layout, alarm bells would have rung and the following questions spring to mind (Answers by Delta management).

1. How much of the work has already been done ?
Answer : Not very much just general site excavation.

2. How does this affect the Resource Consent and Engineering Consent ? Answer : Noble (NIL) are or have already applied for a variation.

3. Weren’t there specific provisions for the roading and layout for this zone ?
Answer : Yes there were.

4. What can we do in the meantime while we wait for the varied consent ? Answer : We can do some site clearing but NIL have assured that the consent is a formality and are keen for us to continue.

5. But we cannot do work without a consent surely ?
Answer : Err…NIL have assured us that it won’t be a problem, the CCC are relaxed about us continuing.

6. Is there anything in writing from CCC to say this ? This seems very risky – Councils have to comply with the Building Act, they don’t have a choice, otherwise people would be doing deals with Council inspectors all over the place, and Council would be liable.
Answer : No, we don’t have anything in writing yet.

7. Why don’t we just stop work until it’s sorted ?
Answer: We’ve already set up on site and we want to make the most of the Summer.

8. Directorial discussion ensues : My position would have been : We think the risk is too great. We are already financing the subdivision and not getting paid until sections are sold. We have the upper hand here. Noble will just have to wait. Changing the roads is a major. We don’t need a court case about working on a major subdivision without a consent with the CCC to tarnish the company at this point.

Clearly, a majority of Directors did not agree with the above, and voted to continue.

A key point is that the Directors didn’t only get one chance to exit Noble. From this point Noble would have been on the agenda at every meeting, and they had many opportunities to stop work, when things went from bad to worse. Instead, it appears they took ALL those opportunities to look the other way and, and one result, apart from many millions written off, was to be a party to illegal work.

Delta may say that CCC were relaxed about working without a consent, or some other vagueness, but the Yaldhurst community and the neighbours were far from relaxed. They were never going to stand by and watch a Developer cynically try to ram through a major change on a land zoning that the CCC had just spent years formulating and with public consultation, etc.

So, readers, what would YOU do ?

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
● 27.2.16 Delta #EpicFail Noble Subdivision Consent : Strictly Optional
● 27.2.16 Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent…
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

14 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Design, District Plan, Economics, Geography, Infrastructure, Name, New Zealand, People, Politics, Project management, Property, Resource management, Site, Town planning, Transportation, Travesty, Urban design

Delta #EpicFail Noble Subdivision Consent : Strictly Optional

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Sat, 27 Feb 2016 at 10:08 p.m. Last updated at 10:32 p.m.

Your correspondent would like to issue a warning to any Dunedin ratepayers venturing into this website : What you are about to read is hazardous to your stress levels. Please fortify yourselves with a nice cup of tea and a big saucer to catch the spills.

We return to the scene of the Christchurch Delta demise today to examine a few “timing and consent” issues.

These may appear to be innocuous words designed not to cause alarm, and indeed, Graham Crombie had assured Dunedin ratepayers more than once that the whole Noble Subdivision problem is merely one of “timing”.

It is now apparent that we cannot take at face value anything that is said by Mr Crombie in regard to Noble, and readers, yet again, not far below the surface, lies another tale of absolute Delta stupidity.

First a few facts to set the scene.

Noble Investments Ltd gained Christchurch City Council consent for 304 lots in May 2009. The subdivision had a small commercial area and a variety of lot sizes.

Crucially, the roads were designed to best practice with a 25m carriage way. The carriageways were separated by a median strip and it had recessed parking bays and cycle lanes. (No cycle lane jokes please!)

Delta started work in late 2009 on the site.

Then in December 2009 NIL (yes readers, NIL by name and NIL by value and many other measures !) applied for a variation to their consent.

This was no minor variation : the commercial area increased by over 200 per cent and the eventual analysis by Abley Transportation Consultants was that the main spine road would have more than double the original vehicle movements.

Readers, please hold your cups tightly :
Delta then ignored the original consented drawings and built the subdivision’s main roads and layout according to a completely NEW plan that had NOT BEEN CONSENTED to by the Christchurch City Council (CCC).

This was not for a day, a week or a month. Delta continued to build the main collector road THAT WAS 4 METRES NARROWER than the consented roadway for at least NINE MONTHS.

Linking back to yesterday’s post your correspondent surmises that the nuclear budget explosion must have happened in late 2009, and the variation being a desperate attempt to cheapen up the subdivision by making the roads narrower and the more commercial area was to pay for the stormwater work that Delta failed to budget for.

Let’s back the truck up here : Can anyone possibly imagine what the DCC would do to a Contractor that continued to work on unconsented work on a massive subdivision for a year in Dunedin ?

The DCC prosecutes landlords for adding an extra room to their student flats, not to mention trying to close down the Saddle Hill quarry which actually has some sort of consent.

In August 2010 neighbours complained to CCC that unauthorised work was occurring on the subdivision and things then got VERY messy. The CCC did issue a retrospective consent, but the Yaldhurst community and many CCC councillors are up in arms about the decision to grant retrospective consent. The Yaldhurst community are seeking a judicial review of the decision. The situation is still not resolved.

Oh, and by the way the December 2009 variation to the consent deleted a road connecting the neighbouring land that NIL had agreed to build, which is another reason why, five years on, the project is still mired in legal action.

Yep, Delta knew how to pick em ! Delta being Delta were too stupid to realise that if NIL were happy to clothesline the neighbour whose co-operation it needed, it would have no compunction doing the same to them.

But readers, that’s not all : there’s is more utter ineptitude :

The CCC got around to warning NIL at some point that any unconsented work was done at the Developer’s risk.

And the Developer, NIL, told CCC that it continued to work because ….., OF THE AVAILABILITY OF THE CONTRACTOR.

There is no way NIL could insist that Delta break the law and continue to work.

In other words, Delta continued to work on the site because it wanted to, because it was easier than finding other work. Another possibility is that Delta felt compelled to continue because it created the whole problem with its monumental stormwater mistake. However two acts of stupidity is still stupidity.

In an act of supreme hubris, it knew the work was unconsented but thumbed its nose at the CCC and did it anyway.

This, from a CCO.

Yes the Developer, NIL are the laughing stock of the industry and have no credibility. But Delta were their enablers. Delta were stupid enough to indulge them when any other contractor would have walked away in disgust.

Words have nearly failed this correspondent. (Apologies again for the caps – stress!)

So, let us return to the directors.

What did they know and when did they know it ?

Did they ever ask management the first and most basic question on a project, “Have you got consent ?”

or, each month, “are there any changes we should know about ?”

or “any changes to our risk profile ?”

Can they read a plan ?

Did they ever visit the site ?

Do they have any aptitude at all to keep tabs and rein in the management of a civil contracting firm?

This correspondent does not believe that the management of Delta, a Council Controlled Organisation, would have kept the Directors in the dark. They are bureaucrats, after all, and would be careful to pass on anything contentious.

On Luggate and Jacks Point, the Auditor-General actually commented that the board had been fully involved and Warren Larsen noted that more transparency and communication was required at the DCC companies.

In the troubled history of the directorial shortcomings of the DCC companies, this is a new low point.

Your correspondent, also, is incredulous that the ODT had never bothered to investigate any of the specific acts of stupidity at Noble.

The information is all public record. We can be grateful to What if? Dunedin that they have provided a forum for this issue.

The Noble Subdivision is an intermodal multiple train wreck.

Correction received.
Sun, 28 Feb 2016 10:27 pm

At the above post, your correspondent made two errors in regard to the reduced width of the main roads on a number of items :

The reduction in carriage way was from 19.5 m to 11.5 m, a reduction of 8 m, not 4 m….

The roads reduced in width was not the main collector road : It was both the main collector road AND the loop roads…. that is, the majority of the roading.

Delta advert p58 MarApr2011 canterburytoday.co.nz

Related Posts and Comments:
● 27.2.16 Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent…
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

Noble Village Subdivision, Yaldhurst Road – Site Plans Dec 2009
Source: CCC Archives – Proceedings (March 2012)

NIL Yaldhurst Site Plan Dec2009 PS-01
NIL Yaldhurst Site Plan Dec2009 PS-02
NIL Yaldhurst Site Plan Dec2009 PS-03
NIL Yaldhurst Site Plan Dec2009 PS-04
NIL Yaldhurst Site Plan Dec2009 PS-05

41 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Design, District Plan, Economics, Geography, Infrastructure, Name, New Zealand, OAG, People, Politics, Project management, Property, Resource management, Site, Town planning, Transportation, Travesty, Urban design

Delta #NUCLEAR EpicFail —Noble Subdivision : Incompetent Contracting

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Fri, 26 Feb 2016 at 11:03 p.m. Last updated Sun, 28 Feb 2016 at 2:49 p.m.

Subdivision 101 : Don’t forget the STORMWATER DISCHARGE

Firstly, your correspondent apologises for the teenage habit of using caps in text for emphasis, but recently acquired knowledge some of which is shared below, defied conventional grammar.

An aside: your correspondent was overly fulsome in his praise of Delta CEO Grady Cameron’s transparency this week, when he revealed that Delta spent $3.3M “strengthening their position” vis-à-vis the $20M + debt owed to Delta on the Noble Subdivision at Yaldhurst, Christchurch.

It would have been a lot more credible had Mr Cameron revealed this TWO YEARS AGO, when as outlined in the National Business Review today, the deal was actually agreed.

Your correspondent now knows why the cone of silence has descended upon the Delta Directors, Grady Cameron, GCFO Grant McKenzie and Mayor Cull on this matter.

Mayor Cull has claimed this is just a bad debt. With all respect to the Mayor (that he is due) that statement is simply bovine excrement.

Mayor Cull on Morning Report sounded desperate when he claimed that Noble was not the same as the Jacks Point and Luggate debacles. In this he is correct —it was worse.

It is a tale of a perfect storm of contracting ineptitude as well as directorial torpor.

It is well covered by various posts and indeed the Auditor-General’s report that Delta had severe governance problems, due at least in part to a preponderance of accountants and numbers men. Warren Larsen in his 2012 report, politely said that this led to a culture of “excessive collegiality” (lovely phrase) at the board level. A more accurate description would be the Board acted as a band of serial head nodders.

Your correspondent can report that Delta executive management, and without doubt Dunedin City Council (DCC), knew that the project was in default in 2010 for millions, if not before.

Delta started work on the subdivision in 2009. Your correspondent understands that one arm of Delta / DCC loaned money to the contracting arm so that wages, suppliers and outside contractors could be paid.

This is important because there were it seems some parameters around the loan advances from the finance arm to the contracting arm.

Delta took around two years to complete the development. This is also very instructive because this correspondent’s information is that Delta left site several times because the finance arm would not advance money. Delta’s directors knew they had a dog by the tail in 2010.

So the critical question is – why was the project in default to a degree that caused Delta to leave the site several times between 2009-2011 ?

Readers might think : What was that deadbeat developer up to that caused this default ?

Sadly : the really, really dispiriting fact is that Delta themselves appear to have been the architect of the default that led us to this utter shambles through sheer contracting incompetence.

It seems that Delta provided budgets and estimates to the developers for the subdivision work. In return for one arm of Delta advancing money to pay the other arm, Delta got to do the subdivision work at prices somewhat over market rates.

The Developer relied on the Delta numbers for their budgets to their funders and to set section prices.

The elementary and fatal mistake that Delta look to have made is that they priced the work off incomplete drawings. This was only fatal because they did not know what any other experienced Canterbury civil contractors knew, which is that the STORMWATER DISCHARGE requirements which is controlled by the Canterbury Regional Council, were becoming ever more complex and were a very big cost.

Even if the exact design was not known, a competent contractor would have made some allowance or sought further information, particularly when they were not in a competitive situation. However without knowing the exact details, it looks like the Delta staff had their blinkers on, priced what they saw on the incomplete documents, and catastrophe resulted.

While Delta destructed millions of public funds on Noble, the directors slumbered on. They either had no clue about what questions to ask management to certify if things were under control at Noble, or knew and covered it up.

From what this correspondent can ascertain, Delta started work onsite before the Canterbury Regional Council Consent was issued, which is an issue in itself that bears scrutiny. For a short while earth was being moved, roads built and things were OK.

Then while work onsite is charging on….. BOOM !!!! a NUCLEAR budget explosion emerges when it is discovered that Stormwater discharge requirements will cost $6-7 MILLION, which is MORE than Delta’s ENTIRE contract. The Stormwater discharge had to be installed for all stages which meant there was no quick recovery for Delta at the end of Stage 1.

From there, the financial future of the project and Delta’s payday was doomed. This correspondent understands that the gross realisation of Stage 1 of the subdivision was $6M LESS than the COST of the work. Releasing more stages required more advanced funds from Delta, which appears to have happened, but other legal action then held up any release of sections to market.

By starting the subdivision and agreeing to be at risk (ie forgoing progress payments until sections were sold) Delta were doomed by their own actions. Once they started, they had to keep going until it was finished, otherwise they had no chance of ever seeing any money. Their budget mistakes made sure that the developers who already were spurned by the banks and dealing with 3rd tier lenders had no chance of additional funding.

Delta continued to pour money into the project and watch while problem after problem continued to bedevil the project.

The final indignity and rebuke to Delta is that the mortgagee sale documents apparently treat the land as a bare land development and do not even consider it a subdivision, ie NO value is attached to the $11.3M of Delta work, because the completed work wasn’t built to CCC specifications. Delta must share some blame for this also – it is another example of Delta’s inexperience in the Canterbury market.

This correspondent is determined to bring the directors to account and this will be the subject of future posts.

This correspondent acknowledges that he is seeing through a glass darkly as it were in relation to the precise facts. Some figures and details may not be quite right, but the overall picture portrayed we can be confident of. Mr Cameron is urged to release the full facts about Noble and ignore the ineffectual Mr Crombie before more unpleasant facts about Noble and other Delta matters emerge.

It is clear that the past and present directors (with perhaps one exception) have erected a wall of silence to keep the Public and Councillors in the dark about the massive destruction of public funds they have presided over. They are unfit stewards.

It is now this correspondent’s opinion that the Auditor-General’s investigation of Delta is essential.

Related Posts and Comments:
● 25.2.16 Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 14.5.14 (via DCC website) Larsen Report February 2012
A recent governance review of the Dunedin City Council companies was conducted by Warren Larsen.

● 20.3.14 Delta: Report from Office of the Auditor-General
Inquiry into property investments by Delta Utility Services Limited at Luggate and Jacks Point

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

14 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Dunedin, Economics, Geography, Infrastructure, Media, Name, New Zealand, OAG, People, Politics, Project management, Property, Resource management, Site, Town planning, Travesty, Urban design

Delta #EpicFail: Mayor Cull —Forced Sale Fundamentals 101

Election Year : The following opinion is offered in the public interest. -Eds

Updated post
Thu, 25 Feb 2015 at 5:22 p.m.

### radionz.co.nz Thu, 25 Feb 2016
Morning Report with Susie Ferguson & Guyon Espiner
Will Dunedin council’s Delta get paid for stalled subdivision? Link
8:44 AM. Critics of a council-owned company owed millions of dollars from a housing subdivision say the public has been kept in the dark.
Reporting by Otago correspondent Ian Telfer
Audio | Download: OggMP3 (3′ 48″)

Yaldhurst Village 1Image: Supplied

Received from Christchurch Driver [CD]
Thu, 25 Feb 2016 at 9:39 a.m.

Mayor Cull on Morning Report today demonstrated a minimal grasp of commercial reality. He claimed that Delta’s position could not be disclosed because there were “negotiations” with “a third party” (a buyer).

Memo to Mr Cull : A mortgagee sale is the first secured party saying – we have had enough – make us an offer. The amount owed on the other securities is of ZERO interest to the buyer except for the situation outlined below.

What IS of great interest to the buyer, and what Mr Cull DID disclose is that there was only a single party involved. Doh !!!! The “third party” now knows that there there is no competition and the price just went down.

The only time further ranking securities amounts would affect the sale price is when there is a chance that the sale might fetch MORE than the amount of the total debt. Mayor Cull was certainly not saying that, and we can be sure if there was any remote possibility that the Delta core debt of $11.3M with the additional $3.3M being all recovered he would be shouting that from the rooftops.

Mayor Cull confirmed again that there was nothing “dodgy”, or “illegal”, it was just a bad debt and there was no finance element to the deal.

Mayor Cull can then, after the sale process is concluded, reassure ratepayers that he is correct with a full report on the fiasco.

By his own words today he is obligated to do so.

Note : This correspondent was peripherally involved in a forced sale process of a recently completed project of a similar size to Noble (Yaldhurst) Subdivision. It had none of the planning or legal issues that plague Noble’s Yaldhurst. Debt was in excess of $20M and the forced sale process yielded a sale for less than a quarter of that.

[ends]

Yaldhurst Village location map [villagelife.co.nz][villagelife.co.nz]
Yaldhurst Village site received 14.2.16Image: Supplied

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
● 24.2.16 Delta #EpicFail —Noble Subdivision: Cameron, Crombie & McKenzie
● 23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 20.3.14 Delta: Report from Office of the Auditor-General

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

16 Comments

Filed under Business, DCC, DCHL, Delta, Democracy, Dunedin, Economics, Geography, Infrastructure, Media, Name, New Zealand, People, Politics, Project management, Property, Resource management, Site, Town planning, Urban design

Delta #EpicFail —Noble Subdivision: Cameron, Crombie and McKenzie

Election Year : The following opinion is offered in the public interest. -Eds

Received from Christchurch Driver [CD]
Tue, 23 Feb 2016 at 10:02 p.m.

This correspondent was very interested to read today’s front page ODT article which appeared to confirm the suspicions of an earlier post.

Delta CEO Grady Cameron must be given credit for being honest and transparent, for confirming that Delta spent $3.3M last year buying more debt on the Noble (Yaldhurst) Subdivision. This is in contrast to the cabbage-like behaviour of DCHL chairman Graham Crombie, and DCC/ DCHL financial controller (GCFO) Grant McKenzie. It has hard to escape the conclusion that Mr McKenzie when questioned by city councillors must have known the amount of money Delta spent “strengthening its position”, ie buying up securities that ranked ahead of the Delta security. First, he said he did not know the figures involved, then he indicated to the ODT after Monday’s council meeting that the figure of $3M “was not accurate”, and that he “could not say” what the figure was. Simply put, if Mr McKenzie could not say what the figure was, how did he know that $3M was not accurate ? It seems clear he did know, and is dancing on the head of a pin. He could say the figure, but he would not. No one is counting the six figure amounts ! Maximum points for dissembling to that man.

This and other verbal pirouetting at a recent Council meeting where Mr McKenzie was unable to distinguish between dividends and debt repayment despite repeated questioning from Cr Lee Vandervis was also alarming. Perhaps the lure of a return to the relatively debt free safe haven of the University beckons, not subject to scrutiny of the citizens….

The other person of interest is DCHL chairman Graham Crombie, who also has trouble with numbers and counting. Cr Hilary Calvert surmised that the $11.7M already written off plus the $13.3M debt meant that Delta had an exposure of up to $24M. Cr Calvert was close, if not quite right as the $13.3M was the value of the debt Delta estimated, not its actual debt. Mr Crombie said the figure “never got that high”, and that the interest and penalties were “horrendous”. Mr Crombie’s nose is growing : Grady Cameron confirmed the core debt was $11.3M, plus $3.3M buying debt, plus the previous year’s debt write down of $10.7M which has already been attributed to Noble by Delta. These add to MORE than the $24M suggested by Cr Calvert, yet Mr Crombie was happy to sidestep Cr Calvert, Cr Vandervis and any other councillors who were keeping up – not many it seems.

We should pause re : Mr Crombie has consistently said since the Noble debacle became public that all would be well, Delta would recover its core debt and the penalties and interest weren’t of any moment – yesterday he described them as both “horrendous” and “irrelevant”. An interesting question is – why were the penalties and interest “horrendous” ? The answer is because Delta’s security was so far down the security chain as to be virtually meaningless, and as a consequence, its charges indeed were horrendous because they had little chance of ever being paid, and the rates reflect that.

This correspondent is alarmed that an accountant would describe the interest payable on a debt as irrelevant, especially when the company in question has in effect financed the entire core debt of $11.3M with either borrowed money from the DCC, or by foregoing dividends to the DCC. Mr McKenzie would certainly not agree that the interest charges are irrelevant because Delta’s loan funding has been arranged through DCC treasury at somewhere between 4-7% per year from 2012. Although, the actual figures might be 3.9% to 6.85%….

Delta  logo 2We now know, thanks to Grady Cameron, that Delta embarked upon this foolhardy venture with a security ranking somewhere between 4th and 6th in line.

The crucial question is : after this year’s debt purchases, where are they ranked now ? Delta and DCC refuse to confirm this. If they were ranked first, then it would be Delta themselves that had forced the mortgagee sale process. This seems unlikely since if Delta had control as first security, they would have no reason to hide this and the PR department would spin this as Delta taking firm and decisive action to recover their debt. Instead, Mr Cameron meekly says that Delta is a “secured creditor” and the mortgagee sale process is a “significant movement” towards payment. He doesn’t say to who….

It is also a concern why Delta invested a further $3.3M, if they still don’t have control of the project. Others have posited that they almost certainly bought the debt at a reduced value, but the key point is that they don’t have control and first security does not have to have any regard at all to the interests of lower ranked securities. This correspondent has seen at first hand several similar land deals where second ranking securities from large finance companies received zero. One can be sure that the first security will also have heavy penalty rates and other costs will emerge from the woodwork.

Delta were not some minor suppliers on the project. They supplied all of the infrastructure for the subdivision. There aren’t any other big parts to a subdivision. Typically, if the land is correctly zoned, the rule of thumb for the cost of a subdivision is a third land cost, a third infrastructure cost (Delta), and a third profit.

What is truly astounding is that there were at least three securities ahead of Delta and they knew this going into the deal. Any developer that needed three mortgages or debt securities just on the land and the resource consent process before they started work was doomed if there was any trouble, lack of expertise and unforeseen problems. This subdivision had all those, in spades. A further red flag should have been the involvement of one Mr Justin Prain, who previously touted the unique benefits of the similarly doomed 5 Mile town development at Queenstown. In fact the sales pitch was remarkably similar for both developments.

There are many questions to be answered about this debacle, but one that might unlock the whole saga is : what involvement did Murray Valentine, Mike Coburn and Peak Projects have in any entity related to the Noble Subdivision ?

This correspondent urges the other new Delta directors who were appointed after the Noble deal was entered into to show some cojones and order an inquiry. Clearly, it is just too hard for Mr Crombie.

This item via whatifdunedin:

### nbr.co.nz Monday May 25, 2015
Apple Fields’ directors fined $30,000 over filing omissions
By Suze Metherell
Justin Prain and Mark Schroeder, directors of the formerly NZX-listed Apple Fields, have been fined $30,000 each for failing to file financial statements for three years.
The Christchurch District Court found the two directors failed under the Financial Reporting Act to report Apple Fields’ accounts, according to Judge Emma Smith’s February judgment. The Financial Markets Authority brought the charges against the two directors after they failed to report the annual accounts for the financial years between 2011 and 2013. The FMA can seek fines of up to $100,000 for failure to report.
Christchurch-based Apple Fields, which listed on the NZX in 1986, was once New Zealand’s largest corporate orchardist and clashed with the Apple & Pear Marketing Board for the right to export fruit independently. The company moved into property development in the early 2000s, with Mr Prain appointed a director in 2002 and Mr Schroeder in 2003.
Apple Fields entered into a property development arrangement with Noble Investments in Christchurch, which was planning to subdivide land on Yaldhurst Rd into 254 residential sections as well as develop a village centre. After changes in the joint venture, Noble Investments could be considered a subsidiary and its accounts needed to be included in Apple Fields’ group accounts, according to the judgment. The Yaldhurst development stalled when Apple Fields ended up in a protracted legal battle with neighbouring landowners.
Read more

Related Posts and Comments:
23.2.16 DCC: DCHL half year result to 31 December 2015
19.2.16 Delta: Update on Yaldhurst subdivision debt recovery
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
● 29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
● 21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 20.3.14 Delta: Report from Office of the Auditor-General

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

34 Comments

Filed under Business, Construction, DCC, DCHL, Delta, Economics, Geography, Infrastructure, Media, Name, New Zealand, People, Politics, Project management, Property, Resource management, Site, Town planning, Urban design

Delta: Update on Yaldhurst subdivision debt recovery

Election Year : The following item is offered in the public interest. -Eds

Received.

From: Gary Johnson
Sent: Friday, 19 February 2016 5:18 p.m.
To: Elizabeth Kerr
Subject: 160219 Media Statement_Delta half year results – update on Yaldhurst subdivision debt recovery

Elizabeth

We see there has been interest on the What if? Dunedin… on the current position on Delta’s recovery of an outstanding debt related to the Yaldhurst subdivision, Christchurch.

I hope the attached information provides a useful update, ahead of Delta’s half year report for the six months to 31 December 2015, due for release next week.

Kind regards, Gary

Gary Johnson
Marketing and Communications Manager
[Delta Utility Services Ltd]

ATTACHMENT [click to enlarge]

160219 Media Statement_Delta half year results - update on Yaldhurst subdivision debt recovery (scanned)

Related Posts and Comments:
15.2.16 Delta / DCHL not broadcasting position on subdivision mortgagee tender
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
21.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

● 20.3.14 Delta: Report from Office of the Auditor-General

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

52 Comments

Filed under Business, Delta, Dunedin, Economics, Geography, Infrastructure, Name, New Zealand, Project management, Property, Resource management, Site, Town planning, Urban design

Delta / DCHL not broadcasting position on subdivision mortgagee tender

Election Year : The following opinion is offered in the public interest. -Eds

Received from Cr Lee Vandervis
Sunday, 14 February 2016 at 10:43 p.m.

█ Message: An individual interested in the Noble [Yaldhurst Village] subdivision but who wishes to remain anonymous has sent me the attached photograph and the following comment. I believe that it is in the public interest for this comment to be published, as it is largely confirmed by information I have been receiving from interested parties in Christchurch over the last two years.
It seems remarkable to me that the current Yaldhurst subdivision mortgagee sale process has not been widely reported or commented on, especially as DCC’s Delta is so heavily invested in what was always a risky subdivision, a very similar scenario to the Delta Jacks Point/Luggate subdivision that lost $7-9 million.

Yaldhurst Village site received 14.2.16Delta heavily invested in failed Yaldhurst land subdivision, Christchurch

“Taken 13 February.
These are the only residents likely on this piece of land in the near future.

There are pylon radiata right through the land.
According to someone who lives in the subdivision next door, the Noble owner agreed with the next door owner that there could be a road which goes through both subdivisions, which would allow more sections to be developed on the next door land. Apparently he reneged on the deal so as he could put more sections on the Noble land. In the event he has since died, and both NZTA and the Christchurch City Council have not been allowing the subdivision to be signed off because the roads developed on the land are not sufficient for either reading in general or for roads which a Council will take over when the subdivision is complete.

So the number of sections Noble wanted to squeeze out of the land determined the roads which are not right for the land.

It is being advertised as a block of land, without taking into account the infrastructure put in I guess by Delta, because it looks like you would need to start from scratch.

Someone shifts the cows around the land to keep the grass down.

I could not even find a gullible cow who would tell me they thought the land was worth the $10 to $15 million we are pretending Delta could get out of any possible sale, even if they were the first call on the proceeds rather than being in line after a mortgagee or 2 as well as any others with priority claims.”

[ends]

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
30.1.16 DCC Rates: LOCAL CONTEXT not Stats —Delta and Hippopotamuses
29.1.16 Delta #EpicFail —Yaldhurst Subdivision ● Some forensics
21.1.16 Delta #EpicFail —Yaldhurst Subdivision
21.1.16 DCC LTAP 2016/17 budget discussion #ultrahelpfulhints
10.1.16 Infrastructure ‘open to facile misinterpretation’…. or local ignore
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

█ For more, enter the term *delta* in the search box at right.

Posted by Elizabeth Kerr

3 Comments

Filed under Business, DCC, DCHL, Delta, Democracy, Dunedin, Economics, Geography, Infrastructure, Media, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning, Travesty

Delta #EpicFail —Yaldhurst Subdivision ● Some forensics

Election Year : The following opinion is offered in the public interest. -Eds

Noble subdivision in Yaldhurst empty sites 2013 [Iain McGregor-Fairfax Stuff.co.nz]Noble subdivision in Yaldhurst 2013. Iain McGregor/Fairfax

Received from Canterbury Driver [CD]
Fri, 29 Jan 2016 at 1:01 a.m.

Subject: Delta and how to hide $10M

This correspondent was curious to know the extent of Delta’s exposure on their failed attempt at the Christchurch subdivision market. DCHL chairman Graham Crombie becomes more bashful than a teenage boy at his first disco when discussing the potential numbers in the media. Mr Crombie coyly advises that “millions” are owed and he is confident “millions” will eventually, in the fullness of time be received, albeit a few less million than is owed. Link

Of course, as John Maynard Keynes famously said, “in the long run we are all dead”, and this is also clearly the view of the financier (named by The Press last year as Southpac Property Investments) who has watched years roll by with no interest or repayments, and has called in the mortgage.

However much Mr Crombie wishes to hide in the corner, desperate to be ignored, clutching tight to his chest those precious numbers, he has been upstaged. His CEO Grady Cameron, has tantalised us with a peep of a disclosure in his opening statement in the 2015 Delta Annual Report on the DCC website. Mr Cameron confirms without being specific that Delta have “an outstanding debt” on a Christchurch subdivision and that the “fair value” of the secured debt is independently valued at $13.2M. He notes helpfully that this value was up from $12.8M last year. We can all relax now….

Thus we know that $13.2M is included as an asset somewhere in the Delta accounts. Delta says it has $59.705M of assets in its summary on page 15. But does it really ? Page 25 shows the breakdown of assets with $25.244M of the $59.705M being “trade receivables”. (The rest of the assets are basically plant, equipment and property.) At page 46, in “Note 23” safely buried far from public scrutiny, lies the smoking gun of Delta’s financial assets of $25.244M. There it is, a provision for “Less estimated doubtful debts” of $9.761M, that reduces the figure to $25.244M. This is a highly original description for bad debts, but desperate times call for desperate euphemisms.

So let’s be clear here – more than half of Delta’s financial assets ($13.2M) – amount to a bad debt in a failed subdivision, that is

a) now under mortgagee sale

b) has a third (or fourth) tier finance company as first mortgagee (because the banks would not lend on it)

c) that was built incorrectly, with the incorrect sized roads

d) faces ongoing legal action

e) cannot have titles released

f) has noisy 33KV powerlines running through it

g) has been completed since 2013 with no money received.

Continuing on, the news for the Owners (us) becomes more dire. The $9.761M “doubtful debts” included a carry over amount of $4.837M from 2014, which in turn included a $1.932M provision in 2013. The Yaldhurst (aka Noble) subdivision turned bad in 2012-2013, so it is very likely that the vast majority of the entire $9.761M is a bad debt provision for this heinously bad decision.

What it means is that Mr Crombie cannot possibly be “confident” of having a large proportion of the debt repaid. A large proportion has already been written off, it seems. This is not a “timing issue” as he claims. Delta has already written off up to almost $10M. That would put the total Delta exposure in excess of $20M.

Mr Crombie needs to identify how this proposal came to be put to the Delta board and which board members and executive staff supported it. Releasing board minutes on this item would be helpful for interested ratepayers to understand the history. Mr Crombie should also provide a comprehensive, clear and truthful report to Dunedin City Council with the full facts of Delta’s position and how the council-owned company got into this mess. This may be awkward for Mr Crombie as the people concerned will be well known to him but that is the price and the consequence of the position he chose to accept.

Under a worst case scenario, if Delta recovers very little of the $13.2M they say they will get, their solvency is threatened. Up to 80% of the Delta shareholders equity of $15.804M will disappear, with just $2-3M left. That would mean the shareholders equity to debt ratio would be out of this world. Delta has $26.852M of debt (to DCC). To build back up to the current equity position, which at $15.804M is not high, would mean years of retaining earnings within the company with no dividends to Council. Delta’s position would be so weak that the Council would either have to inject funds or DCC treasury would foreclose on its own company….

Delta in 2015 paid DCC a dividend of $2.5M. Without this in future years there will be significant rate rises each year.

That is bad enough but the bigger issue is how, after similar multimillion-dollar Delta debacles at Luggate and Jacks Point, was this allowed to happen. Dunedin ratepayers owe thanks to Cr Lee Vandervis. His has been one often lonely voice attempting to get to the truth of this matter. We must trust that he and any other like-minded councillors will be able to enforce some accountability onto Delta.

[ends]

Related Posts and Comments:
21.1.16 Delta #EpicFail —Yaldhurst Subdivision
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

Posted by Elizabeth Kerr

3 Comments

Filed under Business, DCC, DCHL, Delta, Democracy, Economics, Events, Infrastructure, Media, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning, Travesty

Delta #EpicFail —Yaldhurst Subdivision

Received from Christchurch Driver [CD]
Wed, 20 Jan 2016 at 6:35 p.m.

Last year Delta told Council and Dunedin ratepayers to return to their seats and not to worry about a bit of financial turbulence on the Yaldhurst subdivision, pictured.

Yaldhurst Village 1Yaldhurst Village 2Photos: CD 20.1.16

Delta are owed several million (possibly more) and the story was that all is well, even though they have been not paid for about 18-24 months because they have security over the land.

Sadly for Delta and its owners (us) a security means Jack Squat if the FIRST mortgage or prior ranking securities have not been paid.

And of course the first mortgage holder can simply choose to force the sale, and IGNORE lower ranking securities, until all their loan, penalty interest, selling costs, legal fees are covered.

The question of interest is – what is an unusable subdivision going to fetch, Jack Squat perhaps ?

Other Urgent questions for Delta:

1. How much is still owed ?

2. Have they been paid anything on this project in the last year ?

3. What do they know about the forced sale process ?

4. What is the total amount of debt secured against the property that ranks ahead of them ?

5. What is the range of the estimated mortgagee sale price – just a range is fine thanks !

6. Is the company owing Delta solvent, and does it have any other assets that can be pursued ?

7. Which group of directors at Delta authorised this multimillion-dollar project ?

8. Did Delta themselves know or check that the subdivision was not designed to the CCC requirements before they started ?

9. Will anyone be held accountable for this spectacularly inept decision to be involved and any loss resulting ?

[ends]

ODT 18.3.15 Expects Delta to be paid 'millions' [odt.co.nz] screenshotwhatifdunedin screenshot: ODT Online

New Zealand Companies register: Delta Utility Services Limited (453486)

█ Directors: David John Frow (appointed 25 Oct 2012), Trevor John Kempton (01 Nov 2013), Stuart James McLauchlan (01 Jun 2007), Ian Murray Parton (25 Oct 2012)

More: Historic data for directors

Related Posts and Comments:
15.12.15 Noble property subdivision aka Yaldhurst Village | Mortgagee Tender
21.9.15 DCC: Not shite (?) hitting the fan but DVL
20.7.15 Noble property subdivision —DELTA #LGOIMA
1.4.15 Christchurch subdivisions: Heat gone?
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

Posted by Elizabeth Kerr

Election Year. This post is offered in the public interest.

12 Comments

Filed under Business, DCC, DCHL, Delta, Democracy, Economics, Events, Infrastructure, Media, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning, Travesty

Noble property subdivision aka Yaldhurst Village | Mortgagee Tender

Updated post 21.1.16 at 4:35 p.m.

█ Tender now closes 4pm Friday 12 February 2016
http://www.realestate.co.nz/2702107

32.83 ha in 11 lots – http://www.realestate.co.nz/2702107
Listing # AH3988 Listed 28 Nov 2015
Tender closes Friday, 22 January 2016 at 4pm

Confirmation of site as that of Yaldhurst Village (Noble) at http://www.villagelife.co.nz/contact/

[click to enlarge]

Yaldhurst Village Mortgagee Tender [realestate.co.nz - Harcourts]

Yaldhurst Village contact information [villagelife.co.nz]

Yaldhurst Village location map [villagelife.co.nz]

█ Think DELTA. Delta Utility Services Ltd (453486)

█ Think long-in-the-tooth Delta Directors and their consultant(s).

█ Think Grady Cameron (overpaid chief executive).

█ Think Jacks Point and Luggate ($9 MILLION of Dunedin ratepayers’ money down the gurglar – represented as $6M in the Auditor-General’s report).

Same old crew. Same old formula?
Woopsie (Dunedin ratepayers $19 MILLION exposure at Yaldhurst Village – how’s that going – “climbing!”).

█ WHAT NOW ? ? ?

Related Posts and Comments:
20.7.15 Noble property subdivision —DELTA #LGOIMA
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II…. Noble property subdivision

Posted by Elizabeth Kerr

9 Comments

Filed under Business, Construction, DCC, DCHL, DCTL, Delta, Democracy, Economics, Infrastructure, Name, New Zealand, OAG, People, Pet projects, Politics, Project management, Property, Resource management, Site, Town planning

DCC AMAZE —oh, more fraud

DCC logo (fraud) 2

DCC CULTURE OF ENTITLEMENT
‘Enormously disappointing’ —And Enormously Expected.
‘ONE MAN’ did it. An outright fairytale.
DOLLY didn’t, either. More to come !!

### ODT Online Mon, 10 Aug 2015
Further cases of fraud at council
By Chris Morris
The Dunedin City Council says the discovery of five more examples of fraud and theft inside the organisation is “enormously” disappointing. […] Details of the smaller incidents emerged last week, in response to Otago Daily Times questions, a year after the discovery of the Citifleet fraud.
Read more

█ ODT blocks public comments to this item.

ODT 10.8.15 [Source: DCC]

ODT 10.8.15 Further cases of fraud at council p1[screenshot]

Related Posts and Comments:
7.8.15 MOU DCC and TCFT New Aquatic Facility #MosgielPool
4.8.15 Hundreds of DCC Staff receive fraud detection/prevention training
28.7.15 DCC tender fraud includes Citifleet —not for discussion
23.7.15 Publicise: laudafinem.com
207.15 Noble property subdivision —DELTA #LGOIMA
13.7.15 Jeff Dickie: Edinburgh tough, Dunedin (DUD)
4.7.15 DCC Citifleet, [a] Deloitte report leaked
25.6.15 DCC Citifleet COVERUP #screwy
17.6.15 Citifleet: ‘Checkpoint’ interviews Dave Cull
4.5.15 Cr Lee Vandervis: Why I continue to vote. #email
1.5.15 Cr Vandervis unlikely to quit several missions #coverup #naturaljustice
24.3.15 Noble property subdivision —DELTA
23.3.15 Noble property subdivision: “Denials suggest that we have not learned.”
17.3.15 DCC —Delta, Jacks Point Luggate II….
3.1.15 DCC: Street talk NEVER HAPPENED
28.4.15 Today at DCC in pictures
24.4.15 DCC re Dr Bidrose’s time as most senior Citifleet Manager
23.4.15 DCC severely FAILS councillor #naturaljustice #contempt
18.3.15 Lee Vandervis releases emails #Citifleet investigation
13.3.15 Cr Vandervis: LGOIMA request – Citifleet … Deloitte Report
24.12.14 Dunedin: Watching the detectives
1.12.14 Stadium Review: LGOIMA request and 2009 Town Hall speeches
18.12.14 DCC: Deloitte report released on Citifleet
21.11.14 Stadium Review: Mayor Cull exposed
19.11.14 Forsyth Barr Stadium Review
1.9.14 DCC Fraud: Further official information in reply to Cr Vandervis
30.8.14 DCC Fraud: Cr Vandervis … urgent need for facts and record to be public
27.8.14 DCC whitewash on serious fraud, steals democracy from citizens
22.8.14 DCC: Deloitte report referred to the police #Citifleet
3.7.14 Stuff: Alleged vehicle fraud at DCC
1.7.14 DCC: Far-reaching fraud investigation Citifleet
28.5.14 DCC: Audit and risk subcommittee
20.3.14 Delta: Report from Office of the Auditor-General
19.3.14 ORFU: Black-tie dinner, theft or fraud?
26.2.14 DCC: New audit and risk subcommittee a little too late !!
14.2.14 DCC: Broadband AND bicycles #fraudband speed
1.12.13 Secret Commissions Act aka ‘Backhanders Law’

█ For more, enter the terms *deloitte*, *citifleet*, *fraud*, *conduct*, *vandervis*, *delta*, *orfu* in the search box at right.

Posted by Elizabeth Kerr

17 Comments

Filed under Business, Carisbrook, Citifleet, Construction, CST, Cycle network, DCC, DCHL, DCTL, Delta, Democracy, DVL, DVML, Economics, Enterprise Dunedin, LGNZ, Media, Name, New Zealand, NZRU, NZTA, OAG, OCA, Ombudsman, ORFU, People, Police, Politics, Pools, Project management, Property, SFO, Site, Sport, Stadiums, Town planning, Transportation, Urban design

DCC tender fraud includes Citifleet —not for discussion

Mayor Cull is papering over cracks.

QUESTION
Where did the Deloitte report on Citifleet disappear to after it was leaked to ODT? Somewhere deep in a mud tank, at South Dunedin?
Deloitte produced three Citifleet reports; at least two of these show people are liable (present tense) for prosecution.

Where has ODT been to not take the cover off said blocked mud tank.

What makes Dunedin Police so reluctant to prosecute.

Cull and Bidrose “say” just one man, Bachop, is guilty of the +$1.5million Citifleet fraud, which included +152 fleet vehicles lost as well as trade in tyres and parts, and vehicle service contracts (tenders, black market, yawn)….

No wonder Deloitte investigator Kyle Cameron is pissed off at DCC.
No prosecutions ~!!

But back to Monday’s thrashing on tender fraud.
Cr Vandervis has already provided enough evidence to DCC officials, in non public, to add to or start investigations. They don’t want to know.
This is local government at Dunedin, refusing transparency and accountability.

Cr Vandervis hit back, telling the meeting he had provided other evidence to Mr Cull in confidence in the past, and could produce it publicly at the meeting, if needed.

### ODT Online Tue, 28 Jul 2015
Vandervis told to produce ‘evidence’
By Chris Morris
Mayor Dave Cull and Cr Lee Vandervis locked horns yesterday after the latter claimed to have “plenty of evidence” of tender fraud involving the council. The comment, as councillors at yesterday’s full council meeting signed off on a new sensitive expenditure policy, prompted a point of order from Cr Jinty MacTavish, who labelled his comment “disrespectful” and challenged him to produce evidence.
Read more

Report – Council – 27/07/2015 (PDF, 164.6 KB)
Sensitive Expenditure Policy and Procedures

The new policy covered everything from travel and accommodation to entertainment and hospitality, but not contracts and tendering, which Cr Vandervis wanted included as well. (ODT)

About cemetery contracts….

5.3.15 ODT: Praise for council from outgoing manager

Posted by Elizabeth Kerr

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DCC: LGOIMA requests for the last month

Received from Lee Vandervis
‎Tue‎, ‎21‎ ‎Jul‎ ‎2015 ‎at 8‎:‎24‎ ‎p.m.

[screenshot — click to enlarge]

DCC LGOIMA requests from the last month as at 21.7.15

Posted by Elizabeth Kerr

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